How to Make a Holiday Budget

Published on: Oct 26, 2020fb-roundtwitter-roundemail-round
Woman decorating tree covered in dollar sign ornaments and bill garland. Menorah on the mantle. Kelsey Tyler
The Story

The holidays will probably look a little different this year (hey, theme of 2020). Making it even more important to come up with a spending plan ASAP.

Okay, I’m ready.

If you’ve been setting aside money throughout the year...we’re impressed. Check in on what you have and figure out how much more you can bank between now and when you need it.

If you’re starting from scratch, look up last year’s bank and credit card statements for an idea of what the holidays typically cost you. In “normal times,” one rule of thumb is to spend a max of 1.5% of your income on holiday expenses.

I’m not panicking. You’re panicking.

There’s no shame if you need to dial it (way) back this year. Because reminder: these aren’t normal times. Your next move is to write out a list of everything you’ll pay for this holiday season – plus the associated costs. Think: gifts, wrapping paper, shipping fees (since you might not be gifting IRL), plane tickets or gas if you’re traveling, ingredients for special recipes, decorations that look good on Zoom, etc. Don’t forget charitable donations or tips if you’re planning to give.

Check it twice, and see if the total matches up to your ballpark budget. 

Even the 2020 version of my holiday budget is a lot.

So start trimming your regular budget to make up for the extra costs. Then try a few of these tips to save even more:

  • Rethink your gifting traditions. A lot of people’s finances were impacted this year, so awkward conversations could be less awkward. This might be a good year to try out a white elephant or Secret Santa exchange to pare down the number of people on your list.

  • Don’t discount small savings. DIY your cards, reuse old gift bags or turn old newspapers into wrapping paper. It’s what’s inside that counts.

  • Look around for deals. And/or download tools that do it for you. Opt into emails that share upcoming sales, set price trackers, and use browser plugins like Honey or Slick Deals that scan the Internet for coupons so you get gifts at the lowest price.

  • Get a seasonal side hustle. Stores and delivery services need extra help at the end of the year. If you’d rather do extra work from home, there are gigs you can do on the couch.

  • Keep checking in. Revisit your holiday budget regularly over the next two months. It’s okay to spend more or less in one category than you planned – as long as you adjust elsewhere to stay within your overall spending limit.

Related: Holiday Gifting Without Spending (Too Much) Money


The end of the year comes with festive vibes, classic movies, and great cookies. But it can also bring financial stress. Smart planning can help you spread cheer without spreading yourself – or your wallet – too thin.

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Skimm'd by: Ivana Pino, Stacy Rapacon, Elizabeth Smith, and Elyse Steinhaus